Comments on: Money Supply – October 2008 http://www.economicsjunkie.com/money-supply-october-2008/ True Economics Applied in the Real World Fri, 10 Feb 2012 18:24:09 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Nima http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-19 Nima Wed, 26 Nov 2008 17:35:41 +0000 http://www.economicsjunkie.com/?p=482#comment-19 OK, I will ask him. If you could also do this, we'll be more likely to get an answer... OK, I will ask him. If you could also do this, we’ll be more likely to get an answer…

]]> By: Joe http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-18 Joe Wed, 26 Nov 2008 11:57:53 +0000 http://www.economicsjunkie.com/?p=482#comment-18 Yes, but that graph you link to is only looking at the base money supply, which as I understand is too narrow to incorporate the effect of the contraction in credit, so if he were challenged he would simply say that the graph doesn't show the impact of both base money and credit. That's why I would like to see him comment on your graph, which, if I've understood it correctly, incorporates the impact of both money and credit. Yes, but that graph you link to is only looking at the base money supply, which as I understand is too narrow to incorporate the effect of the contraction in credit, so if he were challenged he would simply say that the graph doesn’t show the impact of both base money and credit.

That’s why I would like to see him comment on your graph, which, if I’ve understood it correctly, incorporates the impact of both money and credit.

]]> By: Nima http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-17 Nima Wed, 26 Nov 2008 01:21:45 +0000 http://www.economicsjunkie.com/?p=482#comment-17 Check this one out http://globaleconomicanalysis.blogspot.com/2008/11/parents-pull-kids-from-day-care-and.html Check this one out http://globaleconomicanalysis.blogspot.com/2008/11/parents-pull-kids-from-day-care-and.html

]]> By: Joe http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-16 Joe Wed, 26 Nov 2008 00:29:44 +0000 http://www.economicsjunkie.com/?p=482#comment-16 Thanks. I've been scrolling round Shedlock's site for what feels like eons and I couldn't find anything where he was commenting on this type of evidence. Great site Nima. I will keep coming back here. Thanks. I’ve been scrolling round Shedlock’s site for what feels like eons and I couldn’t find anything where he was commenting on this type of evidence.

Great site Nima. I will keep coming back here.

]]> By: Nima http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-15 Nima Tue, 25 Nov 2008 23:38:00 +0000 http://www.economicsjunkie.com/?p=482#comment-15 Regarding: "For some reason I can’t post a comment at the end of your “money-supply-and-the-price-of-treasury-bills” article." This is a bug in the site that I am currently trying to iron out. Some pages, for some reason, don't let me activate comments. Regarding: "...why don’t you send Shedlock your graph of the money supply..." I do think that Mike knows very well that the money supply is soaring. I believe he said that himself in a post. As to how exactly the Fed's actions are affecting business and personal accounts: The massive bailouts are the main reason for this. A lot of money has been injected into the banking system and, it is true, not all of it has made it to business and individual account balances. However, a fraction of those unbelievable $1.3 trillion that the Fed has added since November 21 2008 must end up somewhere (http://www.federalreserve.gov/releases/h41/Current/). The Fed has more than doubled (!!) its asset holdings in 1 year. This is unprecedented. What is a measly $200 billion growth of the money supply when compared to that number? The money is trickling through and will continue to do so, whether we like it or not. Regarding: “For some reason I can’t post a comment at the end of your “money-supply-and-the-price-of-treasury-bills” article.”

This is a bug in the site that I am currently trying to iron out. Some pages, for some reason, don’t let me activate comments.

Regarding: “…why don’t you send Shedlock your graph of the money supply…”

I do think that Mike knows very well that the money supply is soaring. I believe he said that himself in a post.

As to how exactly the Fed’s actions are affecting business and personal accounts: The massive bailouts are the main reason for this. A lot of money has been injected into the banking system and, it is true, not all of it has made it to business and individual account balances.

However, a fraction of those unbelievable $1.3 trillion that the Fed has added since November 21 2008 must end up somewhere (http://www.federalreserve.gov/releases/h41/Current/). The Fed has more than doubled (!!) its asset holdings in 1 year. This is unprecedented. What is a measly $200 billion growth of the money supply when compared to that number?

The money is trickling through and will continue to do so, whether we like it or not.

]]> By: Joe http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-14 Joe Tue, 25 Nov 2008 22:41:40 +0000 http://www.economicsjunkie.com/?p=482#comment-14 Why don't you send this graph to Shedlock and see what he says about that big uptick since August and especialy September. You use a relatively narrow money supply definition, so he can't blame it on that. I would be interested to see what he had to say! Why don’t you send this graph to Shedlock and see what he says about that big uptick since August and especialy September. You use a relatively narrow money supply definition, so he can’t blame it on that. I would be interested to see what he had to say!

]]> By: Joe http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-13 Joe Tue, 25 Nov 2008 22:39:43 +0000 http://www.economicsjunkie.com/?p=482#comment-13 For some reason I can't post a comment at the end of your "money-supply-and-the-price-of-treasury-bills" article. But I was going to say: why don't you send Shedlock your graph of the money supply and get him to comment on that huge uptick since August and especially September. After all, you use a narrow definition of the money supply, so he can't blame the results on that. I would be really interested to know what he had to say! For some reason I can’t post a comment at the end of your “money-supply-and-the-price-of-treasury-bills” article.

But I was going to say: why don’t you send Shedlock your graph of the money supply and get him to comment on that huge uptick since August and especially September. After all, you use a narrow definition of the money supply, so he can’t blame the results on that. I would be really interested to know what he had to say!

]]> By: Joe http://www.economicsjunkie.com/money-supply-october-2008/comment-page-1/#comment-12 Joe Tue, 25 Nov 2008 22:34:54 +0000 http://www.economicsjunkie.com/?p=482#comment-12 Hey Nima Thanks for posting the money supply by component. I understood from that the growth is primarily in personal and business accounts (including sweeps)and cash. That suggests people are hoarding cash, which is what one would expect, but I still don't really get how that constitutes an increase in the money supply. How are the Fed's actions weaving their way into people's deposit accounts? Are these account balances increasing because of money repatriated from investments in foreign currency assets? Hey Nima

Thanks for posting the money supply by component. I understood from that the growth is primarily in personal and business accounts (including sweeps)and cash. That suggests people are hoarding cash, which is what one would expect, but I still don’t really get how that constitutes an increase in the money supply. How are the Fed’s actions weaving their way into people’s deposit accounts? Are these account balances increasing because of money repatriated from investments in foreign currency assets?

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